One-glance verdict
Undervalued
$19.58 our estimate vs market $17.40
Wall Street consensus: $17.00 (-13.2% lower than our fair-value estimate)
11% below our estimate, below the bear case
Fundamentals snapshot
Sally Beauty Holdings, Inc.
SBH · NYQ · Consumer Cyclical · Specialty Retail
Current price
$17.40
52-week range
$11.54 - $17.92
Market cap
$1.63B
Balance sheet
Stretched
5.09x Adequate
Net debt $1.34B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 0.7% last year.
- Reward Returns 23.5% on equity, ahead of 60% of its peers.
- Risk Stock trades 18.3% above its 5-year average P/E.
- Risk Insider ownership is only 1.4% (peer median: 2.9%).
What this company does
Sally Beauty Holdings, Inc.
Sally Beauty Holdings sells beauty products like hair color, skincare, and styling tools. Their money mainly comes from selling these products to everyday customers through their Sally Beauty Supply stores and to professional salons and stylists through their Beauty Systems Group, which is important because it shows they have two main ways to make sales. This dual approach helps them reach a wide range of customers, from individuals doing their hair at home to professionals styling clients in salons.
How the company got here
Sally Beauty Holdings started in 1964 as a single store selling beauty supplies. Over the decades, it grew by opening more stores and acquiring other businesses. A key part of its history involves expanding its reach beyond just retail customers to also serve professional stylists and salons. This dual focus has shaped its business model, allowing it to cater to both individual consumers and the professional beauty industry.
What it actually does
Sally Beauty Holdings is a retailer focused on beauty products. Think of it as a one-stop shop for everything from hair dye and shampoo to nail polish and styling tools. They sell these products both directly to people like you and me who want to do our hair or nails at home, and also to professional hairstylists and salon owners who use them for their clients.
Sally Beauty Supply
This part of Sally Beauty Holdings is all about selling a wide variety of beauty products directly to consumers and also to smaller salons and independent stylists. You'll find everything from hair color kits and conditioners to skincare items and nail polishes from popular brands like Wella and L'Oreal, as well as their own brands. This segment is a significant portion of the company's overall business, serving a broad customer base looking for beauty solutions for personal use or their small businesses.
Beauty Systems Group
The Beauty Systems Group is where Sally Beauty Holdings focuses on serving the professional beauty industry. This segment sells professional-grade hair color, care products, and styling tools directly to licensed cosmetologists and salons. They reach these customers through dedicated professional-only stores, an online presence, and a sales team, as well as through franchised stores under the Armstrong McCall name. This business is crucial for supplying salons with the high-quality products they need for their clients, and it represents a substantial part of the company's revenue.
What management is betting on now
Management is focused on strengthening both sides of their business. For Sally Beauty Supply, they are looking to improve the in-store experience and expand their own product lines. For Beauty Systems Group, the goal is to better support professional stylists and salons by offering more specialized products and services. They are also investing in their digital platforms to make it easier for all customers to shop and access products, aiming to drive sales growth and customer loyalty across the board.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$73.32M
FY2025 Q1
$13.38M
FY2025 Q2
$32.17M
FY2025 Q3
$49.13M
FY2025 Q4
$78.00M
FY2026 Q1
$57.45M
FY2026 Q2
$44.12M
FY2026 Q3
$61.63M
Revenue
$935.49M
Net income
$54.08M
Diluted EPS
0.55
Operating cash flow
$80.94M
Free cash flow
$61.63M
Fetching…
Sources
Revenue
$903.38M
Net income
$42.70M
Diluted EPS
0.43
Operating cash flow
$73.28M
Free cash flow
$44.12M
Fetching…
Sources
Revenue
$943.17M
Net income
$45.56M
Diluted EPS
0.45
Operating cash flow
$93.24M
Free cash flow
$57.45M
Fetching…
Sources
Revenue
$947.08M
Net income
$49.93M
Diluted EPS
0.49
Operating cash flow
$120.88M
Free cash flow
$78.00M
Fetching…
Sources
Revenue
$933.31M
Net income
$45.72M
Diluted EPS
0.44
Operating cash flow
$69.43M
Free cash flow
$49.13M
Fetching…
Sources
Revenue
$883.15M
Net income
$39.21M
Diluted EPS
0.38
Operating cash flow
$51.06M
Free cash flow
$32.17M
Fetching…
Sources
Revenue
$937.89M
Net income
$61.01M
Diluted EPS
0.58
Operating cash flow
$33.46M
Free cash flow
$13.38M
Fetching…
Sources
Revenue
$935.03M
Net income
$48.06M
Diluted EPS
0.45
Operating cash flow
$110.67M
Free cash flow
$73.32M
Fetching…
Sources
Is it cheap or expensive?
Fair value $19.58 vs current price $17.40
Wall Street consensus is the average analyst price target: $17.00 (-13.2% lower than our fair-value estimate).
Our most-likely fair value is $19.58 a share — about 12.5% above today's price of $17.40, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $1.3B. Interest coverage 5.1x.
Net debt
$1.34B
Interest coverage
5.09x
Sally Beauty Holdings, Inc.'s profit covers its interest bill about 5.1 times over. which is stronger than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
SBH
BASELINE
Sally Beauty Holdings, Inc.
Total debt $1.52B Interest coverage 5.09x This is the baseline the peer rows are being compared against.
Total debt $2.52B Interest coverage 866.71x +16,925% vs SBH Carries about 170.3x more debt cushion than SBH.
Total debt $4.74B Interest coverage 4.08x -20% vs SBH Carries about 1.2x less debt cushion than SBH.
Total debt $3.30B Interest coverage 1.53x -70% vs SBH Carries about 3.3x less debt cushion than SBH.
Total debt $929.30M Interest coverage 3.22x -37% vs SBH Carries about 1.6x less debt cushion than SBH.
Total debt $301.43M Interest coverage 1.19x -77% vs SBH Carries about 4.3x less debt cushion than SBH.
What you should know
The case for and against SBH
3 Rewards
3 Risks
Rewards
-
Revenue grew 0.7% last year.
-
Returns 23.5% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 18.3% above its 5-year average P/E.
-
Insider ownership is only 1.4% (peer median: 2.9%).
-
Operating margin compressed from 9.6% to 9.3% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
9.06x
Forward P/E
7.79x
P/B
1.88x
P/S
0.44x
EV/EBITDA
7.62x
PEG ratio
0.76x
Profitability
How much profit each dollar creates
Gross margin
52.1%
Operating margin
9.3%
Net margin
5.2%
ROE
23.5%
ROA
6.4%
Health
Liquidity and balance-sheet strength
Debt / equity
1.74x
Current ratio
2.37x
Quick ratio
0.49x
Total debt
$1.52B
Total cash
$173.10M
Growth
How the business has been compounding
Revenue TTM
$3.73B
Revenue 5Y CAGR
-1.1%
EPS TTM
1.92
EPS 5Y CAGR
4.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$368.34M
Free CF TTM
$172.69M
FCF margin
4.6%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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